On the Use of Installed Base Information for Spare Parts Logistics: A Review of Ideas and Industry Practice

Demand for spare parts is often difficult to forecast using historical data only. In this paper, we give an overview of installed based management and provide several ways in which installed base information can be used to support forecasting. We discuss cases where installed base information is used in forecasting at four companies and list the issues involved. Moreover, we review some models to illustrate the potential value of the installed base information and conclude that forecasts of spare parts demand and return can be made considerably more timely and accurate using installed base information.